Singapore: Is it Ready for Hardware Startups?
Between 2005 and 2013 the number of startups in Singapore went from 24,000 to 42,000. That’s one startup for every 130 people per year, and around 5,200 of these were tech startups. From a report on the top-funded hardware startups in southeast Asia, 14 out of 15 came from Singapore.
Although Singapore is known primarily for Fin Tech and Machine Learning, these statistics do a good job of highlighting the field’s growth over the last 5 years. The number of exited startups is growing rapidly, the country’s overall strengths and weaknesses is displayed rather nicely by this infographic, courtesy of techinasia.com.
To find out for myself what opportunities there were for hardware startups, I travelled around some of the hotspots for developing products in the city.
First stop: OMG! Makerspace
The first stop was One Maker Group, or OMG Makerspace in the National Design Centre.
I spoke with one of the managers, Tee Wei In, on the hardware scene and what he felt the city was like for supporting Hardware startups:
“When we first opened the Makerspace, we had intended to serve the maker community of Singapore but shortly afterwards we realise there wasn’t enough demand, so we had to adapt. We haven’t had many makers wanting to progress their products forward but we have worked with a cardboard artist (who’s gotten pretty famous now). I would say there’s plenty of opportunity here, but a lot of the startups are focussing on Deep Tech, AI and Fin Tech.”
OMG makerspace has some fantastic equipment, which could be used to prototype your products. They even offer a skill exchange programme, meaning you can teach other members to use 3D printers, CNC routers, laser cutters etc. in exchange for use of the space and equipment. This particular space looks like it’s under utilised, and has some good opportunities for the hardware entrepreneur.
Next Up: PIXEL LABS
The next stop was Pixel Labs, this is a government funded space where support is given to early stage startups, catering specifically to hardware development. They have a full prototyping workshop, with some very well organised electronic component selection and plenty of space.
I spoke with the manager, Harville Tan, on their approach.
“We want to give founders the right equipment and more importantly, business expertise and mentorship, in order to develop their products here in Singapore. We even partner with Enchant VC, who run an accelerator programme from the space.”
Pixel labs also run educational programmes on the importance of validating your product concept early, involving early prototyping techniques, and techniques to gauge user feedback.
← Here’s a session in full swing.
If you’re thinking of incorporating in Singapore, I would suggest you get in touch with Pixel Labs, you can check our their gov. website here.
Whilst discussing product development and technology in general, both parties recommended I visit another workshop and makerspace, called Homefix-XPC, this one is the biggest in Singapore.
A little further out of the city centre, XPC is jammed packed full of amazing equipment. They have 2x full size flat bed routers and everything else you’d need to create large scale projects. They predominantly cater to furniture designers, but would be equally useful for developing products…
They also have around 6x 3D printers, a vinyl cutter and conveniently, a company that offers SLS builds as a service, based in the space. I would say the only thing lacking is some decent CNCs, but you can’t have everything…
So from the few makerspaces and workshops I’ve visited, there does seem a good support network in place for hardware startups. The other thing to mention is that Singapore has some really decent incentives for incorporating there, the other is probably the most important, and that’s access to funding.
In order to understand what government incentives were out there, I met with Ben, who works for OpenDNA, a Singapore based software company that utilises Machine Learning, they recently went public and are now listed on the ASX. Ben explained the different varieties of incentives that are accessible for companies choosing to base themselves in Singapore.
Local Employee Incentives, according to the EDB (Economic Development Board):
- If you hire someone from Singapore, the government can pay up to 50% of their salary.
- If you hire a foreigner, it’s up to 30%.
- On hiring interns: you’re able to claim a proportion of their salary back.
- RnD costs can be offset from tax, so when developing your product, some of the costs associated are tax deductible.
- Technology assets such as laptops, PCs can also be offset.
Funding in Singapore
If you’d like to understand SEED level investment in Singapore, there’s a great resource at StartupDecisions.com, if you’re not a resident of Singapore, these are the sources that you may still be eligible for:
The SPRING Startup Enterprise Development Scheme (SEEDS) provides equity financing for local startups that have an innovative idea or product.
I.JAM (IDM JUMP-START AND MENTOR)
i.JAM initiated by the Media Development Authority aims to promote innovation and entrepreneurship in Singapore for interactive digital media (IDM) projects. i.JAM extends support to startups that have a unique idea, product or service by extending the i.JAM Micro-funding scheme through a network of various incubators.
SECTOR SPECIFIC ACCELERATOR (SSA) PROGRAMME
The Sector Specific Accelerator Programme (SSA) is part of the Research, Enterprise and Innovation Plan 2015 that aids startups in the medical and clean technology sector. The programme commits up to $70 million to support these startups.
TECHNOLOGY INCUBATION SCHEME (TIS)
The Technology Incubation Scheme (TIS), administered by the National Framework for Innovation and Enterprise (NFIE) invests in Singapore startups.
There are currently over 65 active VCs based in Singapore, you can access a map of their latest investments here.
Is Singapore Right for your Business?
If you’ve developed your product prototype, shown traction and are raising funds, Singapore may be an overlooked opportunity and it’s an option worth considering…
Alex Peet is the Product Development Lead for Central Research Laboratory
If you’d like to read more on hardware startups hit follow, or if you’ve got a product idea and would like to find out more about the Central Research Laboratory Accelerator Programme based in London, take a look here, we’ve just opened our applications for cohort3.